Head-To-Head Comparison: Smartstop Self Storage REIT (NYSE:SMA) versus Whitestone REIT (NYSE:WSR)

Smartstop Self Storage REIT (NYSE:SMA) and Whitestone REIT (NYSE:WSR) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Profitability

This table compares Smartstop Self Storage REIT and Whitestone REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smartstop Self Storage REIT	4.38%	1.00%	0.54%
Whitestone REIT	30.67%	11.12%	4.34%

Insider and Institutional Ownership

69.5% of Whitestone REIT shares are held by institutional investors. 5.5% of Smartstop Self Storage REIT shares are held by company insiders. Comparatively, 3.2% of Whitestone REIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Smartstop Self Storage REIT and Whitestone REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smartstop Self Storage REIT	1	3	4	2	2.70
Whitestone REIT	0	9	1	0	2.10

Smartstop Self Storage REIT presently has a consensus price target of $36.81, indicating a potential upside of 11.79%. Whitestone REIT has a consensus price target of $17.80, indicating a potential downside of 6.09%. Given Smartstop Self Storage REIT’s stronger consensus rating and higher probable upside, analysts clearly believe Smartstop Self Storage REIT is more favorable than Whitestone REIT.

Dividends

Smartstop Self Storage REIT pays an annual dividend of $1.57 per share and has a dividend yield of 4.8%. Whitestone REIT pays an annual dividend of $0.57 per share and has a dividend yield of 3.0%. Smartstop Self Storage REIT pays out 1,046.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Whitestone REIT pays out 59.4% of its earnings in the form of a dividend. Whitestone REIT has increased its dividend for 5 consecutive years.

Earnings & Valuation

This table compares Smartstop Self Storage REIT and Whitestone REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smartstop Self Storage REIT	$294.00 million	6.20	-$1.55 million	$0.15	219.53
Whitestone REIT	$160.86 million	6.06	$49.93 million	$0.96	19.74

Whitestone REIT has lower revenue, but higher earnings than Smartstop Self Storage REIT. Whitestone REIT is trading at a lower price-to-earnings ratio than Smartstop Self Storage REIT, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Smartstop Self Storage REIT has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, Whitestone REIT has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

About Smartstop Self Storage REIT

Symmetry Medical Inc. (Symmetry) is a medical device solutions company, including surgical instruments, orthopedic implants, and sterilization cases and trays. The Company designs, develops and offers worldwide production and supply chain capabilities for these products to customers in the orthopedic industry, and other medical device markets (including but not limited to arthroscopy, dental, laparoscopy, osteobiologic, and endoscopy segments). It also manufactures specialized non-healthcare products, primarily in the aerospace industry. The Company operates in two segments: original equipment manufacturer (OEM) solutions and symmetry surgical. On August 15, 2011, the Company acquired PSC Industries, Inc’s Olsen Medical division. On December 29, 2011 it acquired the surgical instruments product portfolio from Codman & Shurtleff, Inc., a Johnson & Johnson Company.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy.